The long-awaited Federal government campaign to quash state-by-state AI regulations is on. President Donald Trump signed an executive order on Dec. 11 directing the federal government to establish a new national approach to artificial intelligence and to push back against state-by-state AI rules the administration says are slowing U.S. innovation.
For banks, payments firms and FinTechs leaning on AI for fraud detection, credit decisioning and customer-facing chatbots, the message is straightforward: the White House is seeking one federal playbook, not a patchwork of state requirements.
In the order, titled “Ensuring a National Policy Framework for Artificial Intelligence,” the White House frames AI leadership as a national-security and economic priority and points to Executive Order 14179 from Jan. 23, 2025, as the administration’s earlier step to remove barriers to AI adoption. The order argues that state AI laws create compliance burdens, can push developers toward “ideological bias” in models and can spill across borders in ways that affect interstate commerce.
It cites Colorado’s “algorithmic discrimination” law as an example of a state measure that, in the administration’s view, could pressure models to change outputs to avoid disparate-impact outcomes. As the order puts it: “My Administration must act with the Congress to ensure that there is a minimally burdensome national standard — not 50 discordant State ones.”
To execute that strategy, the order directs the attorney general to create an “AI Litigation Task Force” within 30 days with the stated mission of challenging state AI laws deemed inconsistent with the administration’s policy, including on constitutional and federal-preemption grounds. Within 90 days, the Commerce Department must publish an evaluation identifying “onerous” state AI laws, including those that require models to alter “truthful outputs” or compel disclosures that could violate constitutional protections.
The order also links state policy choices to funding. Commerce is instructed to set conditions around remaining Broadband Equity Access and Deployment (BEAD) program funding, limiting certain non-deployment funds for states flagged for onerous AI laws, to the maximum extent allowed by federal law. Separately, it calls on the FCC to consider a federal reporting and disclosure standard that would preempt conflicting state laws, and directs the FTC to clarify when state mandates that alter truthful outputs could be treated as “deceptive” conduct under federal law.
PYMNTS’ recent reporting has tracked the administration’s broader push for fewer constraints on AI development and for federal primacy. In May, PYMNTS covered a House effort to impose a 10-year moratorium on state AI regulation. In July, PYMNTS reported ahead of the White House’s “Winning the AI Race” rollout and the coming executive actions. Later that month, PYMNTS summarized Trump’s AI Action Plan, which emphasized deregulation, AI infrastructure buildout and “free speech” expectations for chatbots. PYMNTS also reported on the administration’s use of AI inside government to identify rules to cut, which is part of the same deregulatory throughline the new order reinforces.
Source: https://www.pymnts.com/